I’m 61 and planning to live off my portfolio until I turn 70 and can claim the maximum Social Security – is this too risky?

One of the most discussed subjects in retirement planning is Social Security benefits and the age at which one should start receiving them.

While you can elect to take them as early as 62, most financial planning experts suggest that it’s more advantageous — assuming you’re in good health and don’t need them to live on — to wait for your full retirement age of 67 (all those born in 1960 or later) or even to 70.

In this case, you are 61 years old, which makes 67 your full retirement age. You’ve decided that the benefits of waiting to 70 outweigh any disadvantages of delaying receiving Social Security.

You plan to live off your investment portfolio until you turn 70. While everyone’s situation is different based on annual living expenses and lifestyle, the pros and cons of doing this are relatively straightforward and not necessarily risky.

Here’s why.

What Are Your Living Expenses?

Financial services firm Corebridge Financial hired Morning Consult in May 2023 to survey 2,284 American adults about their retirement expectations and longevity.

According to the latest Bureau of Labor Statistics (BLS) data, the average annual retirement expense for those aged 65 to 74 has risen to approximately $62,000. For those aged 75 or older, expenses typically drop by about 28%.

It is also important to account for the new $6,000 tax deduction now available to taxpayers aged 65 and older. For single filers earning up to $75,000, this provision can significantly reduce the tax burden on Social Security benefits and portfolio withdrawals.

Suppose your annual living expenses are $62,000. You must withdraw at least this much from your investments to cover your expenses until Social Security kicks in.

The 3.9% Rule and Cash Buffers

While many use the 4% rule, modern research for 2026 suggests a safe starting withdrawal rate of 3.9%. This adjustment accounts for higher bond yields balanced against persistent core inflation.

To mitigate “sequence of returns” risk—the danger of a market downturn early in retirement—many advisors now recommend a “cash buffer” or bucket strategy. This involves holding one to three years of expected withdrawals in cash or short-term bonds, allowing you to avoid selling stocks when the market is down.

Using a 3.9% rate, a $62,000 annual need (plus a $5,000 buffer) would require an initial portfolio of approximately $1.71 million. However, this figure assumes you have no other income for 30 years, which is not the case here.

Don’t Forget Social Security

The critical thing to understand about withdrawal rules is that they often don’t consider your Social Security benefits. By holding off until 70, you are maximizing your guaranteed floor.

For 2026, the maximum monthly benefit for someone retiring at age 70 has increased to $5,181. Furthermore, current projections for the 2027 COLA suggest a potential increase of 3.9% to 4.2% due to rising energy and commodity costs.

While the Social Security Trust Fund faces depletion concerns around 2032, delaying benefits remains a powerful hedge against inflation. If you receive a maximized benefit at age 70, your required portfolio withdrawal drops significantly, often to less than 50% of your total spending needs.

The bottom line: With a maximized Social Security check and strategic use of the new $6,000 senior tax deduction, your required “nest egg” to cover 30 years of retirement is likely much lower than $1.7 million, provided you have a plan to weather short-term market volatility.

However, it is always advisable to seek advice from a qualified financial planner or other suitable financial advisory professional.

Editor’s Note: This article was updated to include 2026 Social Security benefit maximums, 2027 COLA projections, and current Bureau of Labor Statistics retirement spending averages. The revised text also incorporates information regarding the new $6,000 senior tax deduction and replaces the 4% rule with a 3.9% adaptive withdrawal strategy and cash buffer recommendations to reflect current market conditions.